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The nations' top intelligence official told a Denver court Monday that the nation's safety would be imperiled if Qwest employees are allowed to get classified documents about the telecom's secret contracts with the National Security Agency. The employees, who include former CEO Joseph Nacchio want the documents about NSA contracts to fight a civil suit filed against them by federal financial regulators, accusing them of defrauding shareholders in 2001.

In a 12-page affidavit (.pdf), Director of National Intelligence Michael McConnell told a federal district court that turning over to the defense any information about classified and unclassified contracts, including dates of meetings between the telecom giant and the intelligence community "reasonably would cause damage to the national security." Nacchio - along with Robert Woodruff, Afshin Mohebbi, James Kozlowski and Frank Noyes - are being sued for millions in damages in civil court by the Security and Exchange Commission.

In July, Nacchio was sentenced to six years imprisonment for selling $230 million worth of shares before the stock tanked, knowing that the company would not meet its public revenue projections.

Nacchio, who is free on bond pending an appeal, unsuccessfully tried to argue in the criminal case that he expected the company to get classified contracts from the NSA that he thought would make Qwest meet its projections. He argued the NSA withheld the promised contracts as punishment after Qwest declined to help the NSA with a unspecified project that Nacchio believed was illegal to help with without being ordered to do so.

In 2006, after media revelations about the government's secret wiretapping program and phone record data-mining, Nachhio's attorney said that when Nacchio was CEO, Qwest had declined repeated requests from the government for call records.

The trial judge in Nacchio's criminal case ruled that Nacchio's classified defense was irrelevant, but in October, released redacted versions of Nacchio's argument, which contained startling charges that the NSA asked Qwest for some unspecified help in February, 2001, 7 months prior to 9/11. A subsequent story by the National Journal's Shane Harris revealed that the NSA asked Qwest before 9/11 to monitor and data-mine traffic on its own domestic network and report results to the NSA, but didn't ask for access to call record databases until after the attacks.

McConnell's court filing invoked the "state secrets privilege," a powerful legal tool that the government can use to quash portions or all of a civil lawsuit if the matter involves military or intelligence matters. The Bush administration has used the tool to end Sibel Edmonds' FBI whistleblower suit and lawsuits challenging the government's outsourcing of torture and warrantless wiretapping.

McConnell said that any information about any meetings between Qwest and intelligence agencies that concerned "any discussion of classified information" was covered by the privilege, as would any information about unclassified contracts with the NSA if that information would reveal details about the NSA's IT infrastructure.

The full scope of and reason for the request are classified, according to the public filing, but were further explained in classified declarations that only the judge can see.

It's unclear how the judge will handle the assertion. Defendants in cases involving national security matters often ask for documents that could embarrass the government or reveal secrets in order to have cases dismissed or force a plea bargain – its a practice known as 'grey mail.'

The Qwest defendants have until December 4 to respond to the state secrets claim.